Scrap metal exports to be announced soon

Cape Town - The level at which government curbs scrap metal exports will be announced shortly, Economic Development Minister Ebrahim Patel said on Tuesday.

Addressing the media ahead of his budget vote delivered in the National Assembly, Patel said South Africa was in favour of restricting exports and not complete prohibition.

"I have chosen to go with a mechanism that is less onerous, but nonetheless will have the effect of reducing the level of exports of scrap metal," Patel said.

Earlier this year, Patel published a notice in the Government Gazette, stating his intention to issue a policy directive and invite scrap metal users and sellers to make representations on the issue.

"In many countries today... these restrictions can vary from outright prohibition to market mechanisms such as requiring scrap metal exporters to offer the metal first to the domestic users, sometimes with a price discount," he said.

Patel would not confirm whether this would in fact be the model South Africa would use, but said a mechanism needed to be put in place to ensure scrap metal was used as a local feedstock.

"The argument in favour of using this local feedstock ranges from the fact that it's a major local resource that can help to create jobs, to the fact that you can create metal products with a much lower energy emission."

Local steel mills and foundries have reduced output and there have been significant job losses, putting pressure on Patel to act.

"Itac (International Trade Administration Commission) has also similarly issued a notice saying that in view of my draft directive, they seek that companies make direct representations to them on both the desirability and potential form of restriction on the export of scrap metal."

Both Patel and Itac had received extensive submissions from interested parties - which include exporters, local foundries, local steel mills and trade unions.

"I've given a broad directive. They (Itac) then need to identify the most appropriate mechanisms to give effect to that (directive)... and once they've determined that, they will publish a notice that will then have formal effect," he said.